How Payday Loans Online Really Work: Reading the Fine Print
Payday loans online offer borrowers a small amount of cash upfront to be repaid later when the next paycheck comes in. Payday loans are typically short term and priced at a fixed dollar fee. In order to receive a loan, the borrower must provide the lender with a post-dated check for the amount of the loan plus the additional fees. The lender then provides a cash advance, giving the borrower a set period of time before the check will be cashed and the money will be returned to the lender.
When payday loans online are used, the customer applies for the loan using an online application form. The loan is then provided to the customer via direct deposit and withdrawn again on the customer’s next payday. A typical term for a payday loan is about two weeks. At the end of this term, the borrower must pay the debt in full. If he or she does not, there will be additional fees to consider.
Getting Money Fast: Where to Find Payday Loans
Payday loans are available at check-cashing counters, rent-to-own companies, pawnshops and special payday loan companies. In 2010, an estimated 19,700 companies offered payday loans. Many of these companies conveniently offer payday loans online. In 2010, online lenders loaned over $10 billion to customers.
Requesting a Payday Loan: The Requirements
To be approved for a loan, the customer must be a legal adult and have proper identification, a reliable source of income and an open bank account in good standing. Bad credit does not necessarily mean a loan will be denied. A job is not always required, but there must be a regular source of income, such as a disability check, a monthly stipend or financial support from family members. Most lenders also require that the borrower not be involved in an active bankruptcy case.
Payday Loans Online: Deciding Whether a Loan Is the Right Option
Experts agree that payday loans are best for unexpected or emergency circumstances, such as:
- Vehicle breakdowns
- Home repairs
- Emergency illness or injury
It’s possible to get a loan and use it for everyday expenses, but financial stability should be a top concern. Those considering a loan should not only take a look at their current financial situation but also make estimates on upcoming finances to ensure that the loan will be paid back without any problems.
Usury Laws: How They Affect Payday Loans
Some states have what are known as usury laws that regulate the use of payday loans, which can affect the amount a lender can offer borrowers as well as how often a loan can be made or extended. Therefore, before considering an online loan, a borrower should always look into his or her local laws. It’s important to read the fine print and ensure that there’s a full understanding of all the rules, regulations and payments involved in the loan.
Getting the Most Out of Payday Loans: Choose One Reputable Lender
In order to ensure that a payday loan experience goes smoothly, it’s crucial for a borrower to choose a single lender with a good reputation. Make sure to research a lender carefully by looking at reviews and to find one that has a well-maintained and updated website, such as Personal Money Store. Note that borrowing from multiple lenders is illegal in most states, so it is important to choose a lender with care. Additionally, having multiple loans through a variety of lenders would make it very difficult to keep track of what’s owed, and this could result in misjudging finances and ending up in debt. By choosing a single lender that has experience in the business, the loan process can go smoothly.